CORPORATE GOVERNANCE

BY JAGADISH

corporate governance is making a huge wave across the nations and sweeping it
across companies both nationally and internationally

amazing literature has been produced recently by all companies so i thought of

contributing it also in this field through my experience and knowledge on this subject

best of luck to myself on this commonsense subject of corporate governance

so the story begins as to what is corporate governance. big big giants have written
on corporate governance but i am not going to touch on what they think. I am going
present to you what i think on this subject of corporate governance which is not
copied from any source or data it is purely original thoughts of jagadish on a widely
debated and likable subject of 21st century

Reference done by owner,ceo, board of directors or co owner

In corporate governance if at all their has been a reference done by owner, ceo or
board of directors under recruitment division it is the responsibility of board of
directors to do the interview together and given a post as selected by board of
members on mutual agreement or rejection of the candidate. the one who has done
the reference cannot participate in the selection of the candidate referred by him

change of ownership

ownership of company is always owner run by board of directors with

ceo who is also part of board of directors list
if their arises a situation of change of ownership due to multiple
reasons . this change of ownership can be decided either by owner or
stakeholders or board of directors

when this situation arises change of ownership has to happen within

48 hours or if it cant be done owner has to own it till proper owner is
selected. this selection proposal has to be put forward by owner and to
be debated upon by board of directors as for his competence to run
the administration set by owner

question now arises whether board of directors can select owner from
themselves or chosen by them which are not part of owner choice. this
choice cant be taken by board of directors because board of directors
are actually managers managing the organization set up by owner so
board of directors can direct owner to chose others if the list chosen by
owner are incompetent

in case the owner dies suddenly the owner automatically is chosen as

per his will so it is the owner who has to tell well in advance to board
of directors as to whom he has chosen that is why co owner has to be
their along with owner to run the administration approved by board of
directors

incase both die together will comes into picture if that scenario is not
available as to non existence of will automatically heir is chosen by
government with board of directors approval

corporate governance of different countries can be different as

designed by the government and monitored by government as
to its implementation part

OWNER RIGHTS AND RESPONSIBILITIES

owner owns the company and board of directors run it for him . now
question arises as to what is duty of an owner. an owner need not
preside the board meeting but should be intimated every now and
then as to the decisions taken by board through ceo . ceo should
assign a CIO to owner and cio should work along with owner to do
analysis of both company and industry. in times of emergency
situation in company owner can be called upon by board of directors to
see the decision taken and give his approval

if owner is not satisfied with board of members decisions after talking

to ceo , he can issue a meeting of board of members and intimate
them as to his objection regarding decision taken in the board of
directors meeting and put up his proposal . but this board meeting
should be done only after discussing with co owner

the board of directors have to take into consideration his proposal and
pass it again in the board of directors meeting with owner presiding it .
now whatever decision taken by board should be acceptable to owner .
if owner feels that his point has been taken but deaccepted and he
feels that necessary action regarding the company he owns hasnt
been accepted owner can ask the highest justice to come and clarify
the decision taken by board.

ROLE AND RESPONSIBILITY OF CO-OWNER

COowner is as powerful as owner and he also has to have his own CIO
under his belt and both CIOs of owner and co owner has to have the
same information and both should be in touch with each other . the
responsibility of owner and co owner is same and both have to be
present in times of emergency situation. it is mandatory because 2
brains are better than one brain

now question arises as to approval of decision made by board of

directors . if co owner is not happy with the decision taken by board
but owner is happy with the decision taken, co owner first has to
report to owner and take his advice then issue a board of meeting and
put up his case to be passed upon

APPROVAL OF FINANCE:

other than owners money board of directors can use the companies
money for expansion of company plan. but this expansion plan has to
get the approval from board of directors with stakeholders being
intimated upon. stakeholders can file a complaint against company if
approval is for unjust reasons. owner is not responsible for day to day
activities of board of directors but would be present if emergency
situation arises. as to removal of board of director or directors it is
board with owner , co owner would be taken in unison.

the removal person of board member has to put up his presentation

infront of company board of directors where ceo is also part of board
member and his role is also important for functioning of the company
or companies

ceo removal is just like any board of director removal . if entire board
of directors to be removed because of proposal petition filed by the
stakeholders or owner because of mismanagement or for any reason,
it cant be done minimum 5 board members have to be present at any
given point of time with government representative being present if
company is a substantial company contributing for the stakeholders

how much money can board of directors remove from the company .
1/3rd of profit earned for operations,2/3rd of profit to be kept aside.
in case of loss board of directors have to intimate to ceo, cfo, coo,
cmo for removal of money
owner, co owner arent responsible for money management issues
taken up by board directors, but should be intimated if money is
thought by board to be huge . stakeholders meeting is mandatory in
the case of huge money allotment if majority of board members think
it is so . stock exchange would be affected.

owners money should never be touched without their approval . now

question arises as to what owners money is being talked about. money
which owner owns while owning company share.owners money should
never be asked to be liquidated when liquidation of company comes
into picture because owners money is not companies money . owners
and co owners together money share is maximum 5% of total
company share is what jagadish thinks about because owner/co owner
is not running the company administration on day to day lines.

owner/co-owner can use the 5% of money for personal use but should
never purchase shares of company with that. once money spent is
spent , decrease of percentage of share in their company can happen
but increase in percentage or buy back of shares can never take place.

owner has to be careful in spending money of 5 %. owner owns 3%

and co owner owns 2% without further purchase of shares at any
given point of time . passing it on to future owners , future owners
also cannot purchase shares of their company but can purchase shares
of other companies under their personal account.which is also
applicable to owner and co owner

once liquidated stands liquidated.

money used by owner for development of company of his stands

used , he cannot earn money through that investment of money. it is
given to company.

united nations is what countries should be answerable in coming

centuries

creditors most important in stakeholders--- the more they are debate

begins
BOARD OF DIRECTORS AND THEIR POWERS THROUGH
COMMONSENSE

board of directors manage the show of owner and are always under tension hence
board of members can allot their own timings with mutual agreement and in a year
sanction leave . only 5 members minimum have to be present at any given point of
time and maximum 30. why 30 because 30 days in a month. think

board members have to have their own CIO under their belt to get news for
themselves so as to have awareness about society

board of members should be rotational with taking up different posts of top

management every now and then to know the developments specially in research
wing of both science and management. sometimes owner makes mistakes in decision
making so a unison decision of board members can override the decision taken up by
owner and co owner.

if owner co owner asks for explanation a detailed report has to be sent on the spot
within 48 hours regarding why that decision was taken and handed it to mail of CIO
assigned to the owner through ceo with authentic signatures of 5 board members
minimum biometrics . if 48 hours is not sufficient a mini statement is sufficient to be
sent to CIO till a detailed report is generated

board of directors recruitment happens with ceo, cmo, cfo, coo getting a chance to
become board of directors,

retirement age should be 55 as psychology of 21st century states that after 55 men,
women become children or act like children

board of directors can remove any employee but it has to be incompetence and
under ethics to discharge duty but minimum 3 board members should be intimated
and get approval because employee has employee union who takes care of employee
negligence hence if 3 minimum board members approve it can be done . if needed
fine tune it.

surprise checks are mandatory to look at peak performance of employees.

owner and co owner have a right to remove only board of directors that too with
other board of members approval. they cant remove employees, but negligent
behavior etc can be intimated to ceo who looks into the affair and gives his report to
owner co owner

if owner and co owner start removing employees board of directors cant work
properly and get into friction with employee unions but with 3 board of directors
approval employee can be removed by board of director with ceo approval if
required.
Government:

government role as per corporate governance is through governing body of this

corporate governance. they can come only through this route if emergency situation
is created within a company which is contributing for the welfare of stakeholders

Government cant take percentages in shares of companies in order to exercise

corporate governance if it does company would be called as a public government
ruled by government

Government can be invited for discussion if board of directors with owner, co owner
make a decision together with stakeholders approval that government role would
benefit the company or companies managed by board of directors

ownership purchases :

owner of a company can purchase land, building etc for the company but in real
practice he has to get approval from board of directors whether board is in a position
to handle the purchase , owner has the capability to purchase but board of directors
must be capable to manage them and discard the purchase if they cant manage

owner and co owner must intimate of purchase to board of directors if they are doing
it on behalf of company. stakeholders approval is not needed on this account as it is
owner co owner who have thought of expanding the company. the company should
and is not liable to pay money to owner for this type ol service done by owner co
owner unless it has approval from stakeholders.

For every important decision taken by board of directors a stamp paper has
to be submitted to justice department approved by the representative of
justice and neatly documented in the files maintained by company secretary
which should be a ready reference guide to board of directors

online documentation also should be their maintained by company secretary

to board of directors with CIO head also approving it of its existence

intimation to company owner by outgoing company owner

intimation to coming company owner by outgoing owner must be in

accordance with law prevailing in the country to which the present
owner where transaction is occuring has to be done. it has to be in
stamp paper intimating with balancesheet and profit and loss duly
signed by outgoing owner checked up by the government and board of
directors if the company is a substantial company.
no pending cases should be their in the name of outgoing owner , till it
is cleared transfer of owner cant be done even under difficult
situations.

answerable to stakeholders

outgoing owner should intimate to the stakeholders with press meeting

during financial year closing time only and proper documents have to
be shifted to present coming owner . stakeholders must be satisfied as
to the acceptance of the new owner. once it is accepted by
stakeholders transfer becomes easy , if not accepted by the
stakeholders proper legal notice should be submitted and approved by
the court of justice with due notice given to stakeholders as to why
transfer is happening and future plans to be submitted by the new
owner with board of directors giving assurance to stakeholders

meeting :

board members meeting has to be conducted every quarterly at the

release of quarterly statements submitted to stakeholders every
financial year, notification to owner has to be their with proper written
statement to be submitted to CIO assigned to owner, CIO can act as
proxy in meetings on behalf of owner but on special occassions if
board of directors feel that presence of owner , co owner is required
they have to be present to see that conduct of meeting takes place

consultants and their removal by board of directors----

owner

proxy owner and his rights :

CIO usually acts as proxy to owner but CIO doesnt have voting rights
but has only one duty to intimate the meetings conducted by the
board of members to owner, co-owner , minutes of company secretary
can be taken up by CIO on behalf of owner and submit it to owner on
their asking
implicit explicit rules and its effect on corporate
governance :

in any corporate governance their is a provision of explicit implicit

rules but arent mandatory rules to follow unless laid down as
mandatory by the government to which corporate governance is
associated with . commonsense used by the board of directors can be
judged with proper legal documents used during meetings and
documented with proper authentication done with courts.

GOVERNMENTS ROLE IS TO MONITOR SUBSTANTIAL

CONTRIBUTORS OF COMPANY TO SOCIETY AND MAKE IT
SUSTAIN LONGER WITH PROPER LAW AND ORDER

going concern concept and corporate governance :

companies are said to be going concern concept but according to me it

is called butchering the company into malpractice . commonsense
teaches that if board of directors with the help of stakeholders and
justice decide together they can voluntarily close off the company
instead of retaining the company just like that

corporate governance would come into picture only when board of

directors are making decisions

corporate governance is important not ideas. ideas can be generated

at any given point of time but no coporate governance is destruction of
the company

merger of companies is important and not acquisition in 21st

century--- lack of knowledge :

in 21st century it is mergers that give results to companies as

knowledge is power and knowledgable people working as board of
directors give a better picture to the stakeholders .if during acquisition
board of directors are removed knowledge is also lost with passage of
time which was available to the person who was removed . it is better
to increase the board of directors and share information than removal
during acquisition. merger is better
but on certain occassions if it is felt that board of members are
becoming too excess, board of directors partially can be removed on
the basis of those who participate in sharing knowledge and creation of
knowledge. ideas are more important to germinate that number of
board of directors.

those who participate and share knowledge they stay others are
removed

co- owner

co owner is as powerful as owner in making decisions but in history to

be effective their should not be more than two owners for any industry
segment company across handling why ?

co owner is powerful than board of directors and to remove co owner

owner permission and decision approval is very crucial for board of
directors

incompetent owner or owners

the question is in decision making it is first owner and then co owner is

asked but in corporate governance it is decision of both equally is
powerful and to be approved by board of directors on equal terms

board of directors can overwrite the decision of owner or co owner but

a supreme court judge has to be stated with board of directors to
approve that decision taken by the board of directors overriding of
owners decision is legitimate for the benefit of stakeholders if
questioned by the owner or co owners

while change of ownership it is the owner has to pay off the debts to
creditors before handing over the ownership to new owner and if the
debt goes to selling off of plant and machinery it has to be done by the
owner--- clean slate to new owner ownership with supreme court
judge approval is mandatory

selling off of machinery should be done in accordance with board of

directors and board of directors are answerable to the new owner as to
decision making taken with owner as to the selling off of machinery ---
profit selling plants should be sold last if their is no other option , new
owner cant spend the money on the illogical decision taken up by the
owner because the new owner does not have the information about
how the business is being run , it takes minimum 1 to 2 years to know
the operations side of the company taken up by the new owner

it is responsibility of board of directors to see that ethically it was

handed to the new owner because it is board of directors who would
be under line of fire if management doesnt happen properly in near
future and board of directors cannot leave the board without getting
their assent and approval from the new owner and government has a
say in the matter too if company is a substantial company contributing
to the welfare of the country

government with judges have to see that board of directors with owner
took the right decision without mishandling the company

if the new owner is not satisfied with the decision taken by the owner
and still approved by the board of directors new owner can sell it back
to the owner stating of mismanagement within a limited period of time
which would be decided by the judge with government approval as he
was not part of the decisions taken by the owner

now question arises as to period of time to be taken up by the owner

decision to be considered mismanagement -- it is 6 months backward
from the period of sale to the new owner

why 6 months because product life cycle of anything into existence is 6

months

board of directors relationship with owner

Role of ceo : he is just like of board of directors

the best decision to run ceo with board of directors as per jagadish is
to have rotational based type of ceo where each board of director is
given an opportunity to become ceo and the one who became ceo is
reinstated into board of directors wing after his completion period of
fixed tenure decided by the board of directors

foreign company also should follow the same corporate governance as

decided by the national government and shouldnt introduce corporate
governance of its own nation into foreign soil
exporting of goods and importing of goods by any company be it
national or foreign company should be done in accordance with
government . if their is difference of opinion it should be settled off
with the highest court of country it is being operated upon where
export import is being done

if government of country want to do export import business with the

help of government companies or has set up exclusively to do this type
of business and is known to national companies , national companies
can put up a petition infront of highest court in the country and see to
it that within 24 hours maximum 48 hours decision is decided upon

removal of owner can also be done by the board of directors but can
be debated upon by the owner with the help of highest court of justice
whether removal was ethical or non ethical , till a new owner is settled
upon upon removal of owner board of directors can govern the
company but decisions regarding company has to be intimated to new
owner and new owner has to be in power within 48 hours , if it is not
done government should be intimated upon decisions taken up by the
company board of directors if company is a substantial contributor to
stakeholders and consumers in that country

centre and state government relationship under

corporate governance

centre can override the decisions made by state government if centre

feels that security of state is at stake with decision taken. under
normal situations also state government has to give monthly reports to
central government board assigned by prime minister as to activities
being carried out by companies in their jurisdiction

this is needed because centre in times of emergency situation can take

proper decisions along with state government
regarding administration of state. stakeholders can issue a notice to
state government that they are interested in centre interference
regarding corporate governance of company or companies which they
feel are doing unauthorized workload at any given point of time.

if state government feels that centre or central board assigned by

prime minister is taking them for a ride and not giving proper direction
as fast as they require then state government can ask for change of
board which is assigned by prime minister. but this change of board of
directors assigned by prime minister can be changed only if other
minimum 3 governments put up a petition infront of supreme court
say of INDIA asking for the change.

the board of directors assigned by the prime minister actually must be

related to corporate bodies members

example : board of directors of big companies whose duty is to look

into the management holistically regarding company and industry
growth of companies stationed in states.

Based upon the monthly reports and future reports designed by state
government money finance would be provided by the board . if board
is found to be unethical in its operations change of board would
happen within 72 hours .

this unethical activities of board can be petitioned by the state

governments minimum 3 states to the supreme justice and if proven
supreme justice should talk to prime minister and proper course of
action would be taken against the board or board of
member/members.

ARMY , NAVY , AIR FORCE chiefs can be invited into these boards if
they are interested in nations welfare. VOLUNTARY BASIS

how the board has to function assigned by prime

minister

the board actually is independent with no relationship with companies.

daily weekly reports and monthly reports study is what the board has
been assigned regarding state developments. at any given point of
time the board can ask the state chief minister to generate a report
which has to be submitted to the board within one month from the
date of asking.

failure of doing so finance of state can be affected. without reports

board cant assign finance

board is duty bound to prepare reports of their own and reports of

state which are vital or information is vital would be submitted to
planning commission chief prime minister and deputy planning
commission to prepare annual plans and 5 year plans.

board can assign for themselves man power to see implementation of

plans done in state governments.

paradox of the whole world of corporate governance ---- funny

side

MONEY AND DONATION

story of a manhood

a person is illionaire , why dont you donate in trillionaire

a person is trillionaire, why dont you donate in billionaire
a person is billionaire , why dont you donate in crores
a person is crore person, why dont you donate in lakhs
a person is a lakhier , why dont you donate in thousands
a person is a thousandier , why dont you donate in rupees
a person is a rupees owner people say you are a pauper

story of a career personality

a person works hard becomes an executive after education
people say only executive so he becomes a manager
people say only manager so he becomes a managing director of a company
people say only managing director so he becomes a board director of company
people say only board of director of a single company so he becomes a board of
director of companies
people say only board of director of comapnies so he becomes a finance minister of a
country
people say only finance minister when are you becoming prime minister so he
becomes a prime minister
people say only prime minister of a country when are you becoming president of usa
so he becomes president of USA
People say when are doing renunciation and becoming a pope. he is better than
president of usa so he becomes a pope of the whole world
people then say when are you dying , die soon their are people waiting in queue to
become a pope

paradox of the whole mankind ,

moral of the story is that their is no peace looking outside

their is peace within if looked inside , self satisfaction is such a
thing that a pauper is as powerful as pope of the world
but in life their is something called knowledge which saves a
person from devastation and with application of knowledge one
can recoup back to power also from poverty.

it is not knowledge it is application of knowledge with asking

right questions determines the fate of manhood

END